Are games on blockchain killer DApps for mass adoption?

It is without any doubt that the blockchain technology has been a break-ground technological advance in the way the integrity of information and ownership is maintained. Multiple financial services have integrated blockchains, e.g. Ripple. However, based on DappRadar which monitors the usage stats of decentralized applications (DApp) on blockchain, the majority of top used DApps are games, despite the hype of decentralizing everything that people may have heard or read on the media.

Blockchains provide a useful tool for gamers for various reasons including decentralized asset exchanges, verifiable scarcity of virtual objects and collectibles, fast and secure payment networks, and an ability for developers to properly monetize their creations. On the other hand, the search for solutions to providing sustainable and fun blockchain-based games has led to some exciting innovations in blockchain scalability and asset creation.

How are games developed on blockchains and where does revenue come from?

A common problem in traditional games is the difficulty to prove the provenance of virtual digital items, which leads lead to fraud. Using smart contracts on a blockchain allows players/gamers to be confident about the authenticity of certain receiving items since they are tied to the blockchain. Exchanging such in-game items has become a lucrative industry — which is worth $50 billion and is expected to fly rapidly. The in-game virtual assets exchange is not only in the traditional gaming industry for legacy video games such as Call of Duty and Counter-Strike, but also for blockchain-based games such as Cryptokitties, which has been built on Ethereum and has recently become increasingly more popular.

Non-fungible tokens (NFT) are one of the most important contributions of blockchain for the gaming industry. A smart contract for NFT can be used to represent any virtual digital assets in games. Each token has a unique identifier corresponding to the virtual digital assets. Those virtual assets can then be traded in any decentralized market, which eliminates the cost and risks of having intermediaries. These virtual assets can be anything from game skins to virtual cards part of a specific game that are verifiably scarce. The authenticity of individual virtual items is guaranteed using smart contract standards such as the ERC-721 non-fungible token standard and the newer ERC-1155 reference implementation.

Allowing Virtual in-game items and crypto collectibles to be traded easily has been the main objective of some notable exchange platforms such as Wax, OpenSea, and Rare Bits. Different from traditional ways of exchanging in-game items, those decentralized exchanges/marketplaces for non-fungible assets/tokens provide players/gamers the freedom to interact with each other in a peer-to-peer manner that offers a reprieve from current centralized models. Decentralized asset exchanges have the potential to eventually develop into bustling marketplaces in various industries from financial assets to physical assets tied to a blockchain. All of these decentralized exchanges help gamers exchange and liquidate the virtual assets, which are hardly found in the traditional gaming industry.

What are the advantages of gaming on blockchain compared to the traditionals?

Ability to keep track of virtual assets’ ownership

Ease of exchanging and liquidating virtual assets

Elimination of cost and exchange fee for intermediaries

Having a secure, built-in payment system

The ability to integrate blockchain into your games to compete with all traditional games

The ease of getting funding for the projects because of the rich investment in this space: look at the Cryptokitties game for justifications.

The chance to making your games into the mainstream because most games on blockchain are still at early stage and the crypto community is still waiting for a Dapp breakthrough for blockchain mass adoption.

The opportunities to become early winners in this infant stage of this fast-growing blockchain gaming